FreightWaves’ State of Freight webinar for August provided insights into the current freight market, highlighting several key trends that could impact the industry in the coming months. The discussion covered the importance of the upcoming holiday season, a notable increase in West Coast container imports, and the ongoing challenges of trucking capacity.
Boost in Freight Volumes Driven by West Coast Imports
Craig Fuller, CEO of FreightWaves, emphasized the significance of the fourth quarter, driven largely by holiday shipments. According to FreightWaves’ Inbound Ocean TEUs Volume Index, container imports into the U.S. have been steadily rising, with a 14% increase year-over-year in June and 18% in July 2023. This surge in imports, primarily from China, signals an upcoming boost in over-the-road trucking and intermodal transport.
Zach Strickland, FreightWaves’ Director of Market Intelligence, noted that current container movement levels rival those seen during the pandemic era. However, unlike the supply chain disruptions of 2021 and 2022, the market is absorbing these volumes without significant inflationary pressure, largely due to big-box retailers dominating the import activity.
Los Angeles as a Key Indicator of Supply Chain Activity
Los Angeles has emerged as a critical hub for the global supply chain, with freight movements out of the area trending upward since mid-July. The Long Outbound Tender Volume and Rail Intermodal indices reveal a steady flow of goods, indicating that the market is managing these volumes more efficiently than during the pandemic.
Signs of Positivity in Truckload Contract Rates
Truckload contract rates have shown a slight upward trend, a positive sign in a market where spot rates have been volatile. Strickland noted that while this uptick is still tentative, it suggests that the market is gradually moving towards a more balanced state between contract and spot rates.
Potential Impact of Labor Disputes and Excess Capacity
Looking ahead, the industry is watching potential labor disputes on the East and Gulf coasts, though Fuller believes the Biden administration will likely prevent any major disruptions. Additionally, excess trucking capacity remains a concern. Fuller stressed the need for a market reset, which would require some carriers to exit the industry to restore balance and stabilize rates.
This webinar provided a comprehensive overview of the factors shaping the current freight landscape, with a cautiously optimistic outlook for the near future.
Source:
https://www.freightwaves.com/news/state-of-freight-for-august-freight-benchmarks-show-positive-signs
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